Redhall Group order book stands at a record £140m

ENGINEER Redhall Group said its order book is at a record level and the new management team is making progress with sorting out problem contracts.

The Wakefield-based group told shareholders at its annual general meeting yesterday that trading for the current year is in line with expectations although profits will be heavily weighted towards the second half.

Redhall’s chairman David Jackson said such second half bias is not unusual in Redhall’s line of business.

“The new management team continues to make progress in resolving legacy issues and in improving the order book,” he told shareholders.

“The current order book now stands at £140m, which is a record for the group, and high level prospects remain buoyant.”

He added that the sale of non-core businesses announced in December is “progressing satisfactorily”.

The group plans to shift its focus from contract work towards more manufacturing contracts, where margins are greater and the risk is lower.

Three small non-core businesses are being sold and the group is also planning some small acquisitions.

Last month, Redhall announced a string of new contracts as it put a tough two years behind it.

The group’s nuclear division won a deal worth a potential £50m to help maintain Britain’s nuclear warheads.

Redhall Nuclear was chosen by AWE, which provides and maintains Britain’s nuclear deterrent, as a “strategic partner” to supply mechanical and electrical engineering services.

The framework deal is expected to lead to contracts worth an estimated £50m over a potential four-year period.

Redhall also said its manufacturing arm won orders worth a total £7.5m across three contracts for blast and fireproof doors and structures.

The biggest of these was a £4.1m deal for Hyundai Heavy Industries to supply BP’s Clair Ridge project in the North Sea.

Redhall also revealed it has reached a “satisfactory” agreement on a contract at Fellside Boiler Park at Sellafield.

It said that the settlement of the final account at Fellside Boiler Park showed the progress being made to resolve legacy issues by the new management team.

Chief executive Richard Shuttleworth said the contract wins recognised its growing status within both the nuclear industry and the oil and gas supply chain.

The company provides specialist products and services for technically demanding and high-hazard environments.

David Buxton, analyst at brokerage FinnCap, said the deals show that the new management team is making progress.

The new contracts are with key high-profile customers in the nuclear and oil and gas sec- tors.

Redhall reported a £4.6m pre-tax loss in the 12 months to the end of September.

That followed £8.1m pre-tax losses in the prior year.

Redhall is rebuilding itself after a series of troublesome contracts, including the Vivergo biofuel plant in East Yorkshire, led to two years of losses.

It went to the High Court over a disputed contract at the Vivergo biofuel plant in East Yorkshire, and expects a judgment in the coming months.

It has also had production problems with a £20m contract to build doors for the Atomic Weapons Establishment (AWE).

Underlying revenues fell six per cent to £119.5m in the year to the end of September, once Vivergo and other legacy contracts were stripped out.